Workers' compensation insurance tends to be a requirement for most companies. This is very true for large organizations. Some states do not need very small companies to maintain this type of business insurance. However, doing so is still important. It may help reduce your cost risks. Depending on the type of business you are in, there are benefits to investing in a workers' comp policy. Take a closer look at why it is valuable.
Determine Your Legal Requirement
Most companies need to maintain workers’ compensation insurance. State laws require it in various cases. That is, your state sets the rules for when this type of policy is necessary.
Most often, it depends on the size of the company. How many employees you have is a concern, for example. Not all states provide options. Yet, if you are a very small company, you may be able to forego coverage. There are some key reasons, however, why it is almost always better to get covered nonetheless.
Why You Should Invest in It
As a small business owner, every sale is important. Every dollar that comes into your business needs careful management. Most companies believe they are safe, small, and can easily manage a problem if it happens. But, you can't be too careful.
Here are a few examples of how your business may suffer as a result of a single worker injury.
- In an office setting, your employees work hard for you. Perhaps they worked for the company for decades. One day, one stands up, turns the corner, and trips on a carpet. She hits her head on the corner of the desk. She suffers from serious bleeding. She needs long-term hospitalization and rehab. This can amount to thousands of dollars in costs. The injured party might expect workers' comp to pick up the pieces. Could your company pay out of pocket for those losses?
- A worker is removing something from a truck outside your location. The mechanism fails, the item falls on the worker, and he dies. You could face long-term financial obligations here. The loss of life could create a scenario in which you are paying millions of dollars to the family. Could you pay for this?
Workers’ compensation insurance can help cover claims similar to these. It generally covers loss of time at work, medical bills, rehab costs and supplementary income. It may cover death benefits, too. And, it helps by providing you with legal support should you face a claim that results in a lawsuit.
For these reasons, you will benefit from this type of business insurance. A policy could help minimize your risks. It may not cost you much, but it can minimizes financial loss.
Also Read: Why Workers' Compensation is Not Optional